UN Division for Sustainable Development

Case Study Detail Record

Organization type:	Intergovernmental Organization

Name of Organization:	The Renewable Energy and Energy Efficiency Partnership (REEEP)

Name of Focal Point:	Binu Parthan

Initiative Title:	Creating a Link between Energy Services and Income Generation, using Innovative Financing as a Catalyst

Internet links:	http://www.reeep.org/index.cfm?articleid=1402&parentid=915

Scope:	National: - India

Status:	Ongoing

Timeframe:	Start: 2006 End: 2007

Lead Institution:	SELCO Solar Light (P) Ltd.

Stakeholders/Partners:	REEEP, local financial institutions, Self Employed Womes Association (SEWA)Bank

Relevent issues:	- Renewable energy including hydro power

Objectives/Challenges:

Objective:
The aim is to promote innovations to increase access of energy services to rural poor through a multiple approach focused on income generation, innovative financing mechanisms and service delivery mechanisms. Secondly, the project aims to ensure that more energy services-based income-generating products, new credit mechanisms and
creative marketing methods are infused into the targeted markets.
Challenges:
• To make financial programmes more flexible
• To convince the traditional bankers regarding the perceived benefits of a certain energy service
• An ability in the entrepreneur or employee to identify the right energy service for a certain intervention

Lessons Learned:

A "One size fits all" approach does not work for rural energy service enterprises. Each energy service solution is customised and has to be delivered to the doorstep of the customer;
Availability of financing that is available locally and with lower transaction costs is important to increase the development of market for household energy systems.
It is important to link energy services to financing that is needbased and ensure that energy services are directed towards income generation.

Policy Options:

An institutional and financial model to link finance, energy and income generation.

Summary:

SELCO is working with SEWA Bank in Gujarat and various financial institutions in the state of Karnataka to create a sustainable linkage between energy services and income generation.
For energy services to be successfully diffused in the underserved areas of India, economic linkages need to be established. To create effective linkages, appropriate financial programmes need to be implemented, thus the importance of having financial institutions as partners.
The uniqueness will be in the linkages between energy services, financing and income generation. The projects would bring about the need of financing that is either savings- or earnings-based. The aim is to prove that in order to reduce poverty, income-generating activities need to be created, and to create such activities, energy services are essential.